Interview with Patrick Lor
The 7 Questions Interview Series: Angels and Venture Capitalists
The 7 Question Interview Series is an investigative content series where I seek out key leaders in a specific industry and/or subject matter expertise area and ask them 7 key questions that “enquiring minds want to know”. There is a twist however to these questions. I provide the interviewee with a hypothesis for each question to help frame and set context for their answer. This specific series of interviews is ideal for startup founders.
The objective of this series is to establish direct connections with VCs and Angel Investors across the globe and ask them the same set of 7 questions regarding investing in technology startups. I’d also like to know what their appetite is for investing in Canadian startups and why they do or don’t.
Interview with Patrick Lor, from Dissolve
Here’s my interview with Patrick Lor, the CEO of Dissolve, a stock footage company that helps creatives, marketers, and brands tell better stories with video. Patrick is a successful entrepreneur and active in the technology ecosystem on the investee and investment side. His perspective should be valuable to those seeking funding and those offering it.
When would it be appropriate for a startup to seek investment from you?
Ideally, you want angels and VCs asking you if they can participate. That means you would have created that magical combination of customer traction, critical acclaim, and product innovation. Before this happens, I think it’s tough for most seasoned investors to spend any significant amount of time evaluating your business. My advice to early stage companies is to spend more time on building something amazing than on fundraising.
What’s more important: the idea, the team or both?
Let’s ask this question another way: Would you fund an amazing team with a crappy idea, or a crappy team with an amazing idea? Neither sounds all that appetizing. The fact is that most great ventures have both, although the question highlights the fact that companies go through huge changes as they scale. The best companies have brilliantly adaptive teams that can change the business along the way. I think that means it all starts with a great team, but you wouldn’t write the cheque until they came up with something resembling a great starting idea.
What are you looking for in a startup team? What does a winning team look like?
The usual – smarts, experience, determination, plus the ability to work through difficult and stressful times constructively. A winning team has some magic chemistry that allows each individual to perform better than they ever have before.
What are you looking for in an idea? What does a winning idea look like?
Typically, you look for dead simple ideas in established markets that require great execution. Consumer habits die hard, so your business should offer an improvement over conventional products, rather than replacing them with something entirely new & unfamiliar. The 10x rule says if you can offer 10x the service, or offer the same service at a tenth of the price, you’ve got a good chance of disrupting the incumbents. Ideas that are too complicated – for example, processes that require more than 3 steps to complete a transaction, are doomed to fail.
Does a startup really have only one shot?
If you can’t get money from investors, get money from customers. And if you can’t money from customers, you can always find resources to keep things going. Startups last for as long as they can keep the lights on, and it doesn’t matter how. Typically, you raise money so you can cover salaries and rent. But you can get people to work for free, and you can find places to work for free as well.
Can you describe your due diligence and investment process? What’s important for a startup to know about it?
The investment process is a funnel: you want to see a lot of opportunities, and only a few make it through to the end. In between, you might find indicators that keep you interested. The team and idea are good starts. Numbers are great, because almost every investor can do a bit of math. This is where it’s important for entrepreneurs to know their numbers, and tell the truth. Due diligence is simply the process of going through Google Analytics, financial statements, talking to customers, and trying out the product to verify what the entrepreneur has told you already. Any discoveries to the downside is bad news for the entrepreneur, as it brings everything she says into question.
In your view, is Canada a fertile ground for tech startups? If so why and in what ways is Canada unique and competitive in this regard? Are you investing in Canadian startups? If so, why? If not, how come?
All it takes is super smart people. Money will find its way to great people running great companies. Between airplanes and the Internet, you can reach customers from just about anywhere in the world. Without a critical mass of super smart and talented people though, startups will suffer. I think that our government plays a big part in the process by funding universities. Then, it’s up to the rest of us to support the ecosystem by encouraging more young people to take computer science and engineering degrees. Let’s also support young people with mentoring, internships, and jobs.
Most of my investments are in Canadian startups. My current startup is based in Calgary, and it’s a great place to run a company. I don’t know if I could have been any more successful anywhere else.
About Patrick Lor
Patrick Lor is CEO of Dissolve, a stock footage company that helps creatives, marketers, and brands tell better stories with video. He was co-founder of iStockphoto, the world’s first crowd sourced stock photography community, which was sold to Getty Images for US$50 million in 2006. Most recently, he was head of North American operations for Fotolia, a stock photography community backed by private equity firm KKR. He has also held senior marketing and product development roles at Adobe’s Image Club Graphics Division.
Patrick is active in the tech ecosystem with organizations including: iNovia Capital, Flightpath Ventures, Version One Ventures, thea100.org, thec100.org, democampcalgary.com, University of Calgary, Mount Royal University, GrowLab, and FounderFuel.